Thursday, February 17, 2011

Africa Renaissance advises govt on mining taxes

Africa Renaissance advises govt on mining taxes
By By Joseph Mwenda in Choma
Thu 17 Feb. 2011, 03:59 CAT

AFRICA Renaissance Group has urged the Zambian government to approach the issue of mining taxes with confidence in order to generate more resources needed to grow other sectors of the economy.

In an interview, Africa Renaissance Group chief executive officer Stephen Jennings said much as there is need to create an enabling environment for the mining sector to grow, it would not help the country if government was held to ransom by a few investors.

“It’s a question of balance; the key ingredient is the aspiration and the confidence of the Zambian leadership. You don’t depend on a handful of investors that are holding you to ransom; in future you will have more investor options. You should set your private policy from a position of confidence,” Jennings said.

He said governments like Chile in South America managed to develop its economy through resources derived from the mining sector.

“You shouldn’t feel threatened, you shouldn’t feel squeezed and you shouldn’t feel indebted. You can approach the issue rationally and at the same time as an area of investor regulation, ensure stability and certainty which is of utmost importance to the investors.”

“Zambia is a very strong parallel with Chile. Chile was one of the poorest countries of South America and it was not expected to do well but with its main asset which is copper, it has become a very modern economy with strong institutions, very big domestic financial service industry and capital market,” he said.

Jennings said Chile was built by good governance over a multi-decade period of time.

“Chile was built over very liberal economic policies a lot of privatisation and a lot of commitment to building domestic infrastructure,” Jennings said.

He expressed confidence that with enough cash flow coming from the mining resources, other sectors of the economy would develop.

“We see Zambia of having a very strong growth economically, stronger than it has had historically and growth that is very sustainable for decades,” he said.

And Africa Renaissance Group, the parent company of Pangaea Renaissance Zambia, said Africa’s time had come to become the fastest growing region of the world.

“We see the economic dynamic that you are going through as a threatening experience to Asia for the last 35 years. We do not see any reason why Zambia and the rest of the continent is not going to be as successful as Asia and in my opinion, the only difference is that the process will happen faster here,’ said Hasnen Varawalla, Renaissance Group’s deputy head of corporate finance.

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